Nov. 18 (Bloomberg) -- The typhoon that killed thousands of
people in the Philippines has energized debate about whether
rich nations should compensate poor ones for climate-related
losses, a proposal the U.S. and European Union are resisting.

Some 130 countries, including islands concerned they’ll
disappear with rising sea levels, are pushing for reparations as
part of a “loss and damage” mechanism at United Nations
climate talks in Warsaw this week. They blame countries that
industrialized 200 years ago for damaging the atmosphere.

“Many countries around the world are already incurring
losses and damages from the impacts of climate change,” Yeb
Sano, the Philippine lead negotiator whose hometown was
flattened by the storm, said in an interview in Warsaw. “We’d
like to make clear the difference between humanitarian aid and
climate change compensation in the context of historical
responsibility.”

The push reflects alarm about the havoc wreaked by the
typhoon’s 195 mile-per-hour winds and anger that rich nations
seem to be scaling back their ambitions for reducing greenhouse
gases. For the first time since the UN started its annual
climate talks in 1992, countries such as Japan, Australia and
Canada are paring back measures to mitigate fossil-fuel
emissions.

For developing countries, the push for compensation is a
result of the failure of their wealthy counterparts to cut
emissions quickly enough. Loss and damage is an essential piece
in the talks involving about 190 nations, which are working on a
treaty limiting emission in all nations that could be adopted in
2015 and brought into force in 2020.

Red Lines

All nations agreed a year ago that they would set up a
mechanism to deal with loss and damage at the Warsaw meeting.
For industrial nations, including the U.S. and European Union,
any notion of it dealing with compensation is a red-line issue.

“Compensation for what?” Juergen Lefevere, deputy
delegation chief for the European Commission, said in an
interview. “We’re turning a discussion on a challenge that we
have ahead of us into a blame-game of who’s responsible for what
and when.”

The scale of what the cost of the mechanism could be is the
first things giving rich nations reason for pause. Annual
economic losses from natural disasters have almost quadrupled in
the past three decades, the World Bank said in a report.

Losses Quantified

The average reported losses rose from around $50 billion a
year in the 1980s to almost $200 billion a year in the past
decade, totaling $3.8 trillion from 1980 to 2012, according to
the report released today, which used data by Munich Re, the
world’s largest reinsurer. Three-quarters of the total was due
to extreme weather, it said.

The issue was too thorny for lower-level delegates at the
talks to resolve last week. They punted the issue to ministers
and other high-ranking officials who arrive this week to grapple
with the tougher political decisions. They include U.S. Special
Envoy for Climate Change Todd Stern, EU Climate Change
Commissioner Connie Hedegaard, Tanzanian President Jakaya
Kikwete, and his counterpart from the Pacific island nation of
Nauru, Baron Divavesi Waqa.

“Lectures about compensation, reparations and the like
will produce nothing but antipathy among developed country
policy makers,” Stern said in a speech last month at Chatham
House, a research group in London.

Lack of Trust

Developing countries say the need for loss and damage is
the result of not cutting emissions fast enough and the failure
of donors to provide sufficient aid for poor nations to adapt
their infrastructure.

Those concerns gained ground last week when Japan watered
down its plan to cut fossil-fuel emissions, citing damage the
earthquake and tsunami in 2011 did to its nuclear power program.
In December 2012, Canada said it wouldn’t sign up to a new round
of greenhouse gas cuts under the Kyoto Protocol. And Australia
last week introduced legislation to abolish carbon pricing, the
centerpiece of its effort to reduce emissions.

“This is the atmosphere in which we are negotiating,”
Indian envoy T.S. Tirumurti told delegates two days ago. He
called this year’s conference, the 19th, “historic” because
it’ll be the first time ambition to cut emissions is lower at
the end of the two weeks than at the beginning.

Developing nations are looking for other avenues where they
can assign blame for global warming. Last week, China and a
group of 130 nations known as the G77 backed a Brazilian
proposal to examine historical emissions since 1850. The results
would be one basis for working out future emissions reductions,
a plan also rejected by the U.S. and EU.

Aid Pledge

Also being discussed is how industrialized nations will
deliver on a promise they made in 2009 to boost annual climate-related aid to $100 billion in 2020 from $10 billion a year for
the period from 2010 to 2012.

For Brazilian envoy Ambassador Jose Antonio Marcondes de
Carvalho, it’s time for rich nations to “put your money where
your mouth is.” China’s lead negotiator, Su Wei, joined him,
saying, “We want to know what the confirmed financial support
is starting from 2013.”

Island nations fear that rising sea-levels could swallow up
their territory, leading to losses that should be compensated.
Those including loss of sovereignty, culture and the need to
migrate, said Malia Talakai, who negotiates for the 44-country
Alliance of Small Island States. “This is for what we cannot
adapt to,” she said.

Work Plan

The mechanism should help coordinate research into slow-onset changes such as sea level rise, melting glaciers and ocean
acidification, according to Juan Hoffmaister, a Bolivian envoy
who negotiates for the G77 and China. He said developing nations
don’t see the mechanism as a “cash machine,” and envoys
shouldn’t get hung up over compensation.

“It’s important we don’t trivialize this issue just to
that word,” Hoffmaister said. “The focus is on addressing loss
and damage through multiple approaches.”

Sano, the Philippine delegate who hails from Tacloban,
started fasting a week ago until he sees “meaningful progress”
at the talks. He has been joined in fasting by at least 100
environmental activists at the Warsaw meeting.

“I am still fasting,” Sano said. “We have not seen any
substantial movement here.”